Sweden’s housing starts extended a plunge into the second quarter as lower home prices and rising construction costs put the brakes on building activity.
(Bloomberg) — Sweden’s housing starts extended a plunge into the second quarter as lower home prices and rising construction costs put the brakes on building activity.
Construction started on about 14,550 new homes in the first half of the year, which represents a 57% decline from the year-ago period, Statistics Sweden said on Thursday.
Housing starts have been on a downward trajectory since last year, hit by one of the world’s biggest declines in residential property prices that’s in recent months leveled off. Depressed construction threatens to worsen an existing shortage of homes and lead to a surge in unemployment among builders. The industry is already overrepresented in bankruptcy statistics.
While the latest figures will likely be materially revised owing to a lag in reporting, they confirm a trend highlighted by other data such as an indicator from the company Byggfakta, which signals an annual rate of about 25,000 housing starts. That is less than half of the number of homes that need to be built every year to keep up with demand.
Sweden’s economy is facing two years of recession as rising costs force consumers to continue paring back spending into next year, according to Swedbank AB, one of the biggest banks in the country.
Read More: Sweden Set for Two-Year Contraction With Households Squeezed
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